Chief economic adviser Larry Summers and Secretary of the Treasury Tim Geithner are the stewards of economic policy and programs. They have a long public track record. Summers was a key player in repealing the Glass Steagall Act in 1999. In place since the Great Depression, that law prevented banks from wild, risky speculation. Since it was repealed in 1999, banks have run free doing the very things that the act prevented.
Summers was also a key player in the passage of the Commodity Services Modernization Act of 2000. That act brought back derivatives which had been illegal since 1906. These highly speculative market products were the very thing Glass-Steagall would have prevented.
Geithner served as one of the nation's top bank regulators as Chairman of the Federal Reserve Bank of New York, the most powerful Fed by far. He had his own stress test for banks in 2007 and thought everything was fine. Most of those banks are so stressed two years later that they require welfare from the federal government just to stay afloat.
Summers is guiding government policy in the most spectacular welfare program of all - Wall Street welfare. Banks have now received twice as much in welfare payments as they received under Bush and its just beginning.
As Treasury secretary, Geithner is making this happen. He's also working to see that the Federal Reserve offered trillions more in credit guarantees for the failed banks and bankers. Geithner also ratified what most experts called an illegal tax break for the nation's largest banks written into code by a Bush Treasury staffer. It's a $140 billion giveaway that no one will even talk about. By failing to repeal or even discuss it, it's become Geithner's giveaway.
Citizens aren't doing so well. The foreclosure relief bill failed despite Senator Richard Durbin's (D-IL) exceptional effort. That would have kept 1.7 million families in their homes. No help on that one from Summers and Geithner. The credit card bill of rights failed to cap interest rates on credit cards. The 29% rates common at any bank's whim, could have been capped at 15%, President Obama's suggestion.
But there were no breaks for us. Our so-called credit card bill of rights lacks the one right that would have helped -- a ban on usurious fees from the failed banks. We don't get any special tax code changes from Treasury staffers but the banks get $140 billion that simply stays in place because no one in power seems to care. This makes it clear to us who really counts.
Our foreign policy is changing in some ways. We're supposedly reducing our commitment to the war in Iraq but increasing it in Afghanistan. Perennial diplomatic envoy Richard Holbrooke made his views clear when he signed on with Madeleine Albright and other notables to advocate a more aggressive military policy in the Middle East.
The media anointed peace maker is now the president's special envoy to South Asia. He showed his stuff during an April visit to Pakistan. The diplomacy was so adept that the trip was described by a U.S. scholar as "the worst-ever visit" by an American team to South Asia in history. It was a complete disaster."
That diplomacy was complicated by the policies of General David Petraeus, Commander of the United States Central Command. He's responsible for the Predator drone (unmanned killer aircraft) attacks on Pakistan's western region. The drones do a good job of killing both Taliban rebels and innocent Pakistanis. Pakistani's are taking special exception to their fellow citizens being killed by outsiders, the Taliban or robot killer drones.
They'll be seeing more of that in the near future, perhaps. The new policy in neighboring Afghanistan will involve a lot of killing if past records indicate future performance. General Petraeus appointed General Stanley McCrystal to lead the war in Afghanistan. Former head of the top secret Joint Special Operations Command, McCrystal has a reputation for rough tactics that get the job done. Seymour Hersh called the group "an executive assassination ring" that reported directly to Bush and Cheney in the past.
Summers and Geithner have been wrong for over a decade. They supported from the massive deregulation of banks and the enabling of the complicated Ponzi scheme referred to as derivatives. They've continued the flow of trillions from the U.S. Treasury to failed Wall Street financial instructions. And there's no record that they've done anything directly for the vast majority of citizens.
Holbrooke is a constant warrior in diplomat's clothing. He even implied a threat of another 9/11 with the absurd claim that 5,000 Taliban thugs were going to take over Pakistan's nuclear weapons to scare the public into supporting a blank check in South Asia.
General Petraeus has filled in the details of that check despite the lack of public response to Holbrooke's scare tactics. It's going to involve just the type of highly aggressive campaign in Afghanistan that has made us enemies throughout the Middle East.
Is this what we voted for? We've got two Wall Street veterans presiding over the continued looting of the Treasury in behalf of failed banks and financiers. While CEO's keep their jobs at insolvent banks, citizens get nothing. After seven years in war based on shameless lies and over a million dead, we're about to move the action to Afghanistan. We keep doing the same things over and over again and expect different results.
All aboard the Ship of Fools.
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